In the run up to the introduction of the Employment Allowance – which will reduce every employer’s national insurance bill by £2,000 – HMRC has released new figures about how much the scheme could save UK businesses and charities.
The Government estimates that the tax cut will mean employers are nearly £5.5 billion better off per year by the end of Parliament in 2015. This is the equivalent of £200 per employee.
The savings come from three main areas:
- The new Employment Allowance taking effect from April this year
- The abolition of employer national insurance for employees under the age of 21 from April 2015
- Raising the threshold before a business starts paying national insurance for an employee in April 2011.
Visiting small businesses to mark the countdown to the introduction of the Employment Allowance, Chancellor George Osborne said:
“Small businesses make a vital contribution to our economy, creating jobs and stimulating growth. The ones I have visited today want to expand, take on new staff and make new investments so the actions we have taken to cut the jobs tax will be a real boost to them.
“Effectively providing cashback on jobs, the Employment Allowance will help these businesses achieve their goals and help the UK succeed in the global race.”